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November 21, 2013 7:30am - 9:30am

Should boards reexamine stock buybacks? Companies routinely adopt and typically justify programs to repurchase their shares for the following reasons, among others:

Produces highest return on invested capital when holding excess cash or credit is available at attractive rates

Boosts stock prices in the short term

Helps manage stock option overhang

Signals the company's view that its stock is undervalued in the market and management's confidence in the future of the company

Even Apple announced this week plans to increase its $10 billion stock buyback program announced last year to $60 billion through 2015. But despite the popularity of such programs, financial advisers are increasingly criticizing them as mere accounting maneuvers to increase earnings per share without any substantive improvement to the company's performance. While perfectly legal and well within the protection of the business judgment rule, should boards look more closely at what these programs entail, how they are justified and what unintended consequences may ensue?

Our Panel

Diane Holt Frankle is a partner in the Silicon Valley office of Kaye Scholer LLP where she concentrates her practice in mergers and acquisitions and corporate governance. She counsels boards, special committees and management on a wide variety of corporate governance and disclosure issues and on internal investigations. Diane co-chairs the ABA Delaware Business Law Forum and the ABA Joint Task Force on Governance Issues in Business Combinations. She received her JD magna cum laude from Georgetown University Law Center.

John Kelm is an audit partner at Deloitte & Touche LLP with 32 years of experience in Silicon Valley, serving companies in the technology industry ranging from start-ups to multi-nationals. He is a designated specialist in Deloitte's technology, media and telecommunications practice and has led Deloitte's service to numerous high-growth technology organizations with a concentration on global equipment, software and internet companies. John has assisted his clients in more than 20 M&A and public equity and debt offering transactions in the past five years.

Rex Sherry has been a technology investment banker for the past 25 years. He currently is a senior advisor with ATREG, an advisory firm specializing in the sale of manufacturing assets and related businesses for global semiconductor companies. Throughout his career, he has been involved in meeting the needs of large and small technology growth companies in the areas of private placements, initial public offerings, secondary public offerings, debt and mergers and acquisitions. Areas of expertise in the technology sector include the electronics and clean technology fields.

Moderator

Gordon Yamate chairs the board of trustees of the Japanese American National Museum headquartered in Los Angeles and currently serves as a member of the board of directors of the Silicon Valley Community Foundation. As an adjunct lecturer in law at Santa Clara University Law School, he teaches a seminar level corporate governance course that bridges ongoing legal developments in the corporate governance arena with practical strategies for the general counsel in advising management, monitoring corporate compliance and providing leadership in challenging governance matters.